Kultejas News
Crypto News

After a 273% rally, this leading indicator signals that the price of CELO is overbought

Now that the altcoin season is back again, many coins are seeing spectacular price increases every day. In a sideways market, an important skill for a trader is the ability to predict when an asset will break even – and when everything is green, knowing when rallies are ending is equally important. goes.

This week, CELO started a flash rally that generated an almost vertical line on its price chart, but then it quickly faded without initiating a strong second wave.

Aside from constantly keeping an eye on candlestick charts, was there a better way for traders to know in advance when to take off?

A new DeFi initiative increases the price of CELO

CELO is the core asset of the Celo blockchain ecosystem, whose main goal is to facilitate decentralized finance, or DeFi, for underbanked smartphone users around the world. A utility token that uses a proof-of-stake consensus mechanism, CELO is designed to facilitate transaction and governance processes on the platform.

On August 30, a consortium of DeFi entities including Away, Sushi Swap, Curve, 0x, Pool Together and Celo announced a joint educational effort aimed at raising global awareness of decentralized finance, for which they contributed in grants and incentives. Up to $100 million promised. .

In terms of the immediate impact on crypto-asset prices, CELO benefited the most from the news, as the CELO platform will serve as the primary infrastructure for the initiative. The coin’s price immediately soared, with a gain of around 170% within the next 24 hours.

Such extraordinary price spikes often end with difficult corrections. However, there is always hope for investors that a more powerful pump is on the way. In the case of CELO, however, the first peak of $9 remained a high water mark, and the coin’s price only went down from there.

Fear of falling prices

In addition to being one of the top gainers of the week, CELO is one of the few properties that registered a low VORTECS™ score.

VORTECS™ Score is a machine learning algorithm that compares historical and current market conditions around digital assets to aid crypto traders’ decision making. Available exclusively to Cointelegraph Markets Pro clients, the indicator considers a number of variables – including price movement, trading volume, social sentiment and market outlook – to arrive at a score that assesses how well a given coin is currently trading. Whether the position is historically bullish, neutral or not. recession

Higher scores indicate the model’s confidence that currently observed conditions are historically favorable; A low score, which occurs less frequently, appears when the algorithm sees a pattern that precedes consecutive significant price drops in the past.

CELO Value vs. VORTECS™ Score. Source: Cointelegraph Bazaar Pro

As can be seen in the graph above, CELO’s VORTECS™ score fell into the red zone below 30 when the asset price rose from $7.03 to $7.24 and fell below a peak price of $9. While this surge may have looked like the start of the second leg of the rally, historical precedent suggested that the situation around the coin was bearish.

Traders can use this insight in a number of ways. Those who expected the price to rise again may be tempted to abandon these hopes and lock in profits above $7. Another strategy might be to short the CELO, betting that its price will soon return to a downward slope.

For CELO, the asset soon stabilized in the range between $5.50 and $6, which still represents a significant increase from the $4.30 area, from where it exploded during the initial rally.

Cointelegraph is a publisher of financial information, not an investment advisor. We do not provide personalized or personalized investment advice. Cryptocurrencies are volatile investments and carry significant risks, including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-testing strategies are not recommendations. Consult your financial advisor before making financial decisions.

Source link

How to Buy Bitcoin, Dogecoin, Ethereum in India? CLICK HERE

Related posts

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More